In yet another signal that John McCain is looking for change in Washington, the Republican presidential candidate urged lawmakers to adopt five improvements, originally suggested by the Democratic Party, to the government’s $700-billion proposed bailout of the US financial system.
Of course, McCain says these are his ideas. But we know the truth.
CNN) — In his first press conference in nearly six weeks, Sen. John McCain urged lawmakers Tuesday to adopt five of his proposed improvements to the government’s proposed financial rescue plan.
President Bush has asked Congress to act quickly on the $700 billion bailout he proposed following news of failing financial institutions and frozen credit markets.
McCain, speaking in Freeland, Michigan, said the proposed plan has to allow for greater accountability, including a bipartisan board to “provide oversight to the rescue.”
“That oversight is absolutely essential,” McCain said, also arguing against the unprecedented power granted to Treasury Secretary Henry Paulson in managing the plan.
As called for by Nancy Pelosi and other key Congressional Democrats over the past few days.
He said the plan must also help taxpayers recover the $700 billion planned for the bailout.
“That money simply can’t go into a black hole of bad debt with no means of recovering the funds.”
Lawmakers wanted to know why the government couldn’t get stakes in the companies participating in the program or any other concessions. “It’s essential that the taxpayers of this country are compensated for their assistance,” said Sen. Jack Reed (D., R.I.).
The Arizona senator also called for complete transparency in regard to crafting and implementation of any legislation.
“This can’t be cobbled together behind closed doors. The American people have the right to know which businesses will be helped, and what selection will be based on, and how much that help will cost,” he said.
“This is eerily similar to the rush to war in Iraq,” said Rep. Mike McNulty (D., N.Y.), voicing deep skepticism. “We have been told repeatedly by this administration that the economy is fundamentally sound, and then all of the sudden they say the economy is going to collapse. That is unacceptable.”
McCain also called for a cap on executive pay for companies getting federal help. Senior leaders of any firm bailed out by the federal government “should not be making more than the highest paid government official,” he said.
Also called for by the Democrats; this time most prominently by Barney Frank and Nancy Pelosi. “The party is over for this compensation for C.E.O.’s who take golden parachutes as they drive their companies into the ground,” Ms. Pelosi said.
Finally, McCain said it would be “unacceptable” for Congress to add earmarks and so-called pork barrel legislation to this plan.
This is about the only thing I’ve seen that I hadn’t already read from a Democrat … but I don’t think that even the Democrats would be silly enough to attempt to attach any earmarks or pork-barrel spending to this proposal, except perhaps adding provisions to ensure that American homeowners have some sort of recourse to refinance their mortgages in an attempt to keep their houses.
Time will tell … but it seems like McCain is with the Democrats on this one … so perhaps we can convince him to support Obama for President as well.
This is an interesting twist. Obviously, it means that Morgan Stanley will be subject to more stringent regulation, but I wonder what it fundamentally means for the business model. This will be really interesting to following over the next days/weeks/months.
The Federal Reserve said it had approved the transformation of both Morgan Stanley and Goldman Sachs from investment banks to traditional bank holding companies, a step that would place the last two Wall Street titans under the close supervision of national bank regulators, subjecting them to new capital requirements and additional oversight.
The Fed said it would also extend additional lending to the broker-dealers of the two firms, in addition to Merrill Lynch’s, as they make the transition.
The steps effectively mark the end of Wall Street as it has been known for decades, and formalizes a quid-pro-quo that regulators have warned about in the months after Bear Stearns’s near collapse — in return for access to the Fed’s emergency lending facilities, the firms would need to subject themselves to more oversight. The step could have far reaching effects on their profitability and their business models.
WASHINGTON (AP) — The Federal Reserve said Sunday it had granted a request by the country’s last two major investment banks - Goldman Sachs and Morgan Stanley - to change their status to bank holding companies.
The Fed announced that it had approved the request of the two investment banks. The change in status will allow them to create commercial banks that will be able to take deposits, bolstering the resources of both institutions.
The change continued the biggest restructuring on Wall Street since the Great Depression.
The following is the Federal Reserve’s statement on the change in status of Goldman Sachs and Morgan Stanley:
The Federal Reserve Board on Sunday approved, pending a statutory five-day antitrust waiting period, the applications of Goldman Sachs and Morgan Stanley to become bank holding companies.
To provide increased liquidity support to these firms as they transition to managing their funding within a bank holding company structure, the Federal Reserve Board authorized the Federal Reserve Bank of New York to extend credit to the U.S. broker-dealer subsidiaries of Goldman Sachs and Morgan Stanley against all types of collateral that may be pledged at the Federal Reserve’s primary credit facility for depository institutions or at the existing Primary Dealer Credit Facility (PDCF); the Federal Reserve has also made these collateral arrangements available to the broker-dealer subsidiary of Merrill Lynch. In addition, the Board also authorized the Federal Reserve Bank of New York to extend credit to the London-based broker-dealer subsidiaries of Goldman Sachs, Morgan Stanley, and Merrill Lynch against collateral that would be eligible to be pledged at the PDCF.
There’s an old saying that the easiest way to make a million dollars in the bicycle industry is to start with two million dollars … the implication being that associating with cycling is a money-losing business; and it’s easy to see how that saying comes to pass when you look at how many bike shops fail every year, and the financial woes of some of the major bicycle manufacturers, like Schwinn, which went bankrupt twice in 10 years, and Cannondale, which had its own bankruptcy woes until being rescued by a private equity fund.
Unfortunately, it seems like the association of losing money and cycling extends further than just within the bicycle industry, but also to the murky world of hedge funds.
From the lastest issue of The Economist:
Peloton runs out of road A hedge fund is unsaddled by subprime troubles. It may not be the last.
AFTER hubris comes nemesis. On January 24th more than 1,000 leading figures in the European hedge-fund industry gathered for a dinner at the swanky Grosvenor House hotel on London’s Park Lane to witness the EuroHedge awards for 2007. Out of the 20 awards, two—credit fund of the year and new fund of the year (for non-equity strategies)—were awarded to Peloton Partners, a credit manager set up by ex-Goldman Sachs employees in 2005.
But Peloton (the word is related to platoon and refers to the pack of riders in a cycle race) had already hit a sizeable pothole. On Thursday, just five weeks after being honoured with the awards, the fund’s founders, Ron Beller and Geoffrey Grant, were forced to send letters (see link) to investors explaining that they were suspending redemptions from the fund.
It will be interesting to see how this plays out. At this point, no one is predicting a Long-Term Capital Management type implosion, but it would certainly be wise to keep your eyes and ears open.
And if you are interested in what happened at LTCM, I highly recommend Roger Lowenstein’s When Genius Failed: The Rise and Fall of Long-Term Capital Management (ISBN #0375758259) … it’s an excellent read on what many people would consider to be a dry subject.
Looks like the southern part of the valley has a new little service-oriented bike shop, owned and operated by veteran mechanic Alan Greenberg.
Alan was the first person I met when I moved to Utah back in January 2002.
I had visions of being a winter bike commuter … little did I know just how nasty the winters in Salt Lake can be for a cyclist, especially a cyclist from California who is used to being able to ride 365 days per year.
The day after I arrive, I’m reassembling my cyclocross bike in the living room of our apartment, and somehow shear one of the crank bolts. The only bike shop in the neighborhood was Canyon Sports, which tends to be more known as a ski rental shop (especially now that they’re out of the bike business completely). I call the shop and talk to Alan to see if he can do a bottom bracket swap same day … he tells me to bring the bike on down, and he’ll take care of it.
While we were talking we had this little exchange:
“Alan … I really appreciate you taking care of this and helping me out. In California, it was often customary for clients to tip a six-pack of beer when a shop helps them out of jam, but this is Utah … I’m not sure what’s appropriate.”
“Well … my last name is Greenberg.”
“Beer it is!
I stopped by the State Liquor Store across the street from the shop, and picked up a six-pack of good San Francisco Anchor Steam, and we’ve been friends ever since.
Alan’s new shop, Cottonwood Cyclery, is located in Cottonwood Heights, on Bengal Blvd., just a block or so east of the Cottonwood Rec Center … stop by, say “hello” and throw some business Alan’s way; and be sure to tell him that Steven sent you.
I’d sell your heart to the junkman baby
For a buck, for a buck
If you’re looking for someone
To pull you out of that ditch
You’re out of luck, you’re out of luck
The ship is sinking
The ship is sinking
The ship is sinking
There’s leak, there’s leak,
In the boiler room
The poor, the lame, the blind
Who are the ones that we kept in charge?
Killers, thieves, and lawyers
God’s away, God’s away,
God’s away on business. Business.
God’s away, God’s away,
God’s away on business. Business.
Digging up the dead with
A shovel and a pick
It’s a job, it’s a job
Bloody moon rising with
A plague and a flood
Join the mob, join the mob
It’s all over, it’s all over, it’s all over
There’s a lick, there’s a lick,
In the boiler room
The poor, the lame, the blind
Who are the ones that we kept in charge?
Killers, thieves, and lawyers
God’s away, God’s away,
God’s away on business. Business.
God’s away, God’s away,
On Business. Business.
Goddamn there’s always such
A big temptation
To be good, To be good
There’s always free cheddar in
A mousetrap, baby
It’s a deal, it’s a deal
God’s away, God’s away,
God’s away on business. Business.
God’s away, God’s away,
God’s away on business. Business.
I narrow my eyes like a coin slot baby,
Let her ring, let her ring
God’s away, God’s away,
God’s away on Business.
Business…
I’ve been reading Raising The Bar: Integrity and Passion in Life and Business, by Gary Erickson (the founder of Clif Bar, Inc.) recently. I really like his model of a balanced ecosystem for a thriving business. Following this model has allowed Clif Bar to become one of the fastest growing privately-held businesses, and the leader (at least in my opinion) in the energy bar market.
Essentially, his business has five aspirations:
Sustaining Our Brands — Keeping Our Mojo
Natural Demand
Innovation and Reinvention
Nutrition and Quality Control
Connecting with Consumers
Sustaining Our Business — Living Within Our Means
Extraction, Reinvestment, Profit
Rate of Growth
Business as Stewardship
Sustaining Our People — Live Life to its Fullest
Find and Retain the Right People
Compensation
Learning and Growing
Wellness—Work Hard, Play Hard, Recover
Meaning and Purpose in Work
Morale
Sustaining Our Community — Giving Back
Do No Harm
2080 Program—Giving Our Time
Partnerships and Sponsorships
Product and Cash
Influencing Others
Sustaining The Planet — Reducing Our Ecological Footprint
Sustainable Ingredients
Environmentally Friendly Packaging
Greening the Office
Fight Against Global Warming
Partners in Sustainability
Learning from and Encouraging Others
It would be really nice if every company followed this model, but most corporations, especially public companies (including my own employer) tend to chase the almighty dollar.
Michelin (in France) publishes a series of maps covering most of Europe, and in different scales. On many of the maps, roads are marked in red, yellow, or white. The red roads are the major thoroughfares which get you from point A to point B as quickly as possible. The yellow roads are arterial roads which are not as big as the red roads, but still well-travelled. The white roads are the small country roads that allow a traveller to really experience the country.
Most businesses try to always take the red road to profitability and growth. When travelling the red roads, the only that that is important is the destination, but not the journey itself. Just as it is in one’s personal life, the life of a business should also be about the journey and not simply about the destination. It is possible to have integrity and still make money.
God willing, if/when I open my own business, I will be able to focus on the journey.
@ashbuckles WPTouch is just a WordPress plugin to format a WP blog for viewing on an iPhone. WordPress has a app to post in the App Store. in reply to ashbuckles3 hrs ago
